A fifth of those surveyed are adopting a “wait and see” approach on their plans to downsize.
Property tax fears could derail downsizing plans for 2.4 million over 55s (Image: PA)
Fears over Labour’s autumn Budget continue amid rumours that Chancellor Rachel Reeves is considering a mansion tax on homes worth over £2million. Whilst this may seem like a win, new data shows the knock-on effect it’s having on those looking to downsize.
Specialist retirment housing provider, Audley Group, is a two brand group that develops and runs retirement villages. One of which is Audley Villages which targets the luxury market and those with larger pension funds. Recent research from the group states that a substantial 47% of over-55s that are considering downsizing say their plans will be affected by new property taxes.
Owners of property worth £2 million or more could face a new tax (Image: Getty)
With 5.1 million over 55s considering a move, concerns are mounting about the potential impact on the wider housing market. As a result, a fifth are adopting a “wait and see” approach on their plans to downsize, while 13% said they are now not as likely to downsize at all.
According to Audley Villages’ research, as many as 2.4 million would-be downsizers plans could be impacted by the rumours.
Beyond uncertainty around upcoming taxation, other barriers to downsizing remain prevalent, with 56% worrying about the physical effort of moving, 46% being concerned about the cost of moving, and 36% worrying about limited housing choices if they were to downsize.
Worsening with age, 63% of those surveyed over the age of 65 said they were fearful of the risks of physcially moving their belongings; 48% worry over the cost of a move; and 42% are concerned about the limited choices of smaller housing.
Audley Group CEO, Nick Sanderson, said: “The government must tread very carefully on the introduction of property taxes. Already, the rumours are having an impact with potential downsizers putting plans ‘on ice’ or even shelving them altogether. Disincentivising downsizing is a really risky game to play, with movement at the top of the ladder critical to the whole housing system”.
“The decision to downsize already comes with practical and emotional barriers, from the physical effort of moving to saying goodbye to a family home, often with year’s worth of memories. However, the fact that so many people have a limited choice is a failure of our housing system. There is a clear and pressing need for more age-specific housing options that are designed to meet the needs of people as they get older, with supportive communities at the core”.
He added that it is now “time that the potential of age-specific housing is truly recognised,” stating that the “supply must be increased alongside incentives that encourage people, and particularly those moving in retirement living communities, to downsize into properties that match their needs”.
Chancellor Rachel Reeves will unveil her autumn Budget on November 26.
